If you’ve been working in the UK and contributing to the National Insurance (NI) scheme, you may be wondering what happens to those contributions if you decide to move abroad. Are those contributions lost, or can they be transferred to another country’s pension system?
This investigative article explores whether you can transfer your qualified years of National Insurance contributions from the UK to other countries, and which countries allow such transfers or mutual agreements.
What Are National Insurance Contributions?
National Insurance contributions are payments made by employees and employers in the UK to fund state benefits such as the State Pension, unemployment benefits, and health services. Over your working life, these contributions help build your entitlement to a range of benefits, including the State Pension.
To qualify for the full New State Pension in the UK, you need at least 35 qualifying years of National Insurance contributions. However, if you’ve worked abroad or plan to move abroad, you may wonder whether your contributions can be carried over to another country.
Can You Transfer Your National Insurance Contributions to Another Country?
The ability to transfer your National Insurance contributions to another country’s pension system largely depends on whether the UK has a social security agreement or reciprocal agreement with that country.
In general, National Insurance contributions cannot be directly transferred to another country’s pension scheme. However, there are several ways your contributions may still benefit you abroad, especially if you’re moving to a country that has a social security agreement with the UK.
Countries with Social Security Agreements with the UK
The UK has signed reciprocal social security agreements with several countries, which allow for some level of pension or benefits coordination. While your contributions typically remain in the UK and count towards your UK pension, these agreements can help you combine work periods from different countries to qualify for state pensions or other benefits.
Some of the countries with which the UK has these agreements include:
- European Union (EU) and European Economic Area (EEA) Countries
Even though the UK has left the European Union, many EU and EEA countries have agreements in place to help individuals claim pensions from multiple countries. The UK-EU Withdrawal Agreement ensures that if you worked in the UK and an EU/EEA country before Brexit, your contributions in both places will still count toward your pension in the future.
- Countries included:
All EU countries (e.g., Germany, France, Italy), EEA countries (e.g., Norway, Iceland, Liechtenstein), and Switzerland.
- Countries with Bilateral Agreements
The UK has signed bilateral agreements with several countries outside the EU/EEA to coordinate social security systems. These agreements ensure that you can combine your National Insurance contributions with your contributions in another country to qualify for a pension or social security benefits.
- Examples of countries with bilateral agreements:
- United States: You can combine UK NI contributions with your Social Security contributions in the U.S. to qualify for retirement benefits in both countries.
- Canada: The UK-Canada social security agreement allows individuals to combine qualifying years for pension purposes.
- Australia: Under this agreement, your work periods in the UK may be considered when calculating your eligibility for the Australian Age Pension.
- New Zealand: Similarly, work in the UK can be counted toward your pension eligibility in New Zealand.
Other countries with agreements include:
- Japan
- Turkey
- Philippines
- South Korea
- Jamaica
- Barbados
What Do These Agreements Mean?
These social security agreements generally work by allowing you to combine your years of contributions from both countries. This means that if you haven’t contributed enough to qualify for a pension in one country alone, you can still qualify by combining your working years in both the UK and the other country.
For example, if you contributed to the UK National Insurance system for 15 years and then worked in France for 20 years, the reciprocal agreement means that you could potentially claim a portion of your pension from both countries, depending on their respective pension systems.
However, it’s important to understand that your National Insurance contributions themselves do not transfer from the UK to another country. Instead, they are used to calculate the number of qualifying years you have worked, which can then be considered when determining your pension eligibility in both countries.
What Happens If You Move to a Country Without an Agreement?
If you move to a country that does not have a social security agreement with the UK, your National Insurance contributions will remain in the UK. In this case, you won’t be able to transfer your contributions to that country’s pension system.
However, even if you live abroad, you can still claim your UK State Pension when you reach the UK State Pension age, as long as you have the required number of qualifying years.
- Countries without agreements: If you move to a country without a reciprocal agreement (e.g., China, India, or certain South American countries), you won’t be able to combine your UK contributions with that country’s pension system. Your UK National Insurance contributions will only count towards your UK State Pension.
Options If You Move Abroad
- Continue Paying Voluntary National Insurance Contributions
If you’re living abroad and want to continue contributing to the UK State Pension, you can choose to pay voluntary National Insurance contributions. This can help you continue building up qualifying years even if you are no longer living or working in the UK. - Claiming UK State Pension Abroad
Even if you move to a country without a social security agreement, you can still claim your UK State Pension, as long as you meet the eligibility requirements. The UK government allows pensions to be paid to over 100 countries, although you may not receive annual pension increases if you live outside the EU, EEA, or countries with reciprocal agreements.
Conclusion: Transferring UK National Insurance Contributions
While National Insurance contributions cannot typically be transferred directly to another country’s pension system, you may still benefit from your UK contributions through reciprocal social security agreements with certain countries. These agreements help ensure that you can combine your work periods from multiple countries to qualify for state pensions or other benefits.
If you’re planning to move abroad, it’s essential to check whether the UK has a social security agreement with your destination country and explore whether you can continue building up pension entitlements. Always seek advice from a qualified financial advisor to fully understand how your contributions will affect your future pension.